NewsCorporate ActionsNCLT Initiates Insolvency Proceedings Against Bhilai Jaypee Cement Over ₹45 Crore DefaultNCLT Initiates Insolvency Proceedings Against Bhilai Jaypee Cement Over ₹45 Crore Default
The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of Jaiprakash Associates Limited, due to a ₹45 crore default to an operational creditor. The default stems from unpaid coal supplies between September 2021 and June 2022. The NCLT has appointed an interim resolution professional, suspended the company's board, and placed it under moratorium protection. Jaiprakash Associates, the parent company, is already undergoing insolvency proceedings, with Vedanta submitting a winning bid of ₹17,000 crore.
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The National Company Law Tribunal (NCLT) has ordered the commencement of insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of Jaiprakash Associates Limited, following a significant payment default. This decision comes in the wake of a ₹45 crore unpaid debt to an operational creditor.
Key Details of the Case
| Aspect | Details |
|---|---|
| Defaulted Amount | ₹45.00 crore |
| Principal Amount | ₹30.08 crore |
| Interest | ₹15.32 crore (at 24%) |
| Creditor | Sidhgiri Holdings |
| Default Nature | Unpaid coal supplies |
| Supply Period | September 2021 to June 2022 |
| Quantity Supplied | 6,000 metric tonnes |
NCLT's Decision and Its Implications
The NCLT's Cuttack bench, after reviewing the case, has:
- Directed the initiation of insolvency proceedings against Bhilai Jaypee Cement
- Appointed an interim resolution professional
- Suspended the company's board of directors
- Placed the company under moratorium protection
Company's Response and NCLT's Observations
Bhilai Jaypee Cement contested the insolvency plea, asserting its solvency and raising questions about the documentation. However, the NCLT noted that the company did not dispute receiving the coal supplies or challenge the authenticity of the invoices presented.
Parent Company's Situation
It's worth noting that Jaiprakash Associates Limited, the parent company of Bhilai Jaypee Cement, is already undergoing insolvency proceedings. In a significant development:
- Vedanta has submitted the winning bid of ₹17,000.00 crore for Jaiprakash Associates
This case highlights the ongoing challenges in India's cement sector and the broader implications of corporate debt defaults. The insolvency proceedings against Bhilai Jaypee Cement could potentially impact the operations and financial stability of its parent company, Jaiprakash Associates, which is already navigating its own insolvency process.
As this situation unfolds, it will be crucial to monitor how it affects the cement industry landscape in India, particularly in regions where Bhilai Jaypee Cement has a significant presence. The resolution of this case may also provide insights into the effectiveness of India's insolvency and bankruptcy code in addressing corporate defaults and protecting creditors' interests.
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